Is it easy for students to send you money?
- Educators and agents invest heavily in recruitment marketing, but one of the last steps in the enrolment funnel – payment – often gets less attention
- Specialised international payment providers are raising the bar in terms of the ease, speed, and effectiveness with which payments can be made and there are some important links between streamlining that process and recruitment and retention
There is a story, famous in some circles, of an international student who once sent US$53,000 to an Ivy League institution in the United States. But something went wrong: the university received the payment but it got lost in the financial system, or at least they didn't have a way to connect the payment to the student who sent it. Can you imagine the extra stress and confusion (and work and delay) that followed? Because the transfer was not properly attributed to the student at time of payment – a failed "reconciliation", as a financial specialist would say – the student spent a difficult few weeks trying to demonstrate that they had in fact paid their fees.
That is an admittedly extreme example, but multiply it out across the hundreds of thousands of foreign students in each of the major study destinations and you begin to get a sense of complexity and potential pitfalls for students as they try to pay their fees across borders and currencies and financial systems.
That point where a payment is made is the last step in the enrolment funnel, but it's one that often doesn't get enough attention. If you don't have an easy and effective way for students and families to transfer fees to your institution and school, you may be missing an important lever for boosting recruitment and retention.
"When we started, the international student was completely neglected in terms of institutions understanding their payment experience," says Flywire Executive Vice President of Global Education Sharon Butler. "They didn't know that students climbed mountains and swam rivers to get payments to them. You think about all of the investment that people make in marketing and recruitment, but that last step, the payment, is often overlooked."
Flywire is a leader in the burgeoning field of international payment services for the international student market. Service providers in this space harness the power of technology, and considerable expertise in foreign exchange and financial systems, to create new payment systems that offer students and families a less expensive, faster, and easier way to transfer funds to institutions and schools abroad. For additional background on how this all works, please see our earlier post, "Cheaper, faster, easier: Building a better system for sending student fees overseas".
As that backgrounder illustrates, there is a lot of complexity in moving money from country to country, and the trick is to make it simpler. Ms Butler explains, "The challenge is if it is really going to be a great experience for families, it has to be localised to that market. We need to allow them to pay with something that is familiar. If it is easy and familiar, that is a great experience for the family."
That localisation effort can take many forms. It might mean, for example, that if you are a Chinese family and you routinely use Alipay Wallet then you might also want to use Alipay to pay international school fees. Or if you are an Indian family and you need to file tax declarations when making overseas payments, that the payment process provides you with those documents and prompts you to complete and file them. "The process is incredibly complex and we aim to make it incredibly simple," adds Ms Butler.
Speed in payment processing is another top goal for every payment provider, and reconciliation -- that critical step of verifying payment X was made by student Y – is the thing that threatens to slow the process. "Technology is the key to processing speed," says Cohort Go CEO Mark Fletcher. "The opportunity for specialised payment systems like ours is to take that reconciliation and reporting process down from a couple of days potentially to minutes. That means we are automating important steps in the process, such as verifying the student's identity or using machine learning to automatically check and parse related documents, like a tuition statement or invoice." That speed of processing is more than a matter of customer service. It might also factor in how quickly students can receive important admissions documents to support their visa applications, or be eligible to register for courses or arrange housing.
Much of that reporting and reconciliation is automated within specialised payment systems, and this opens the door in turn to new payment models, such as installment payment programmes. You can easily imagine how such options might boost recruitment and student retention, especially in an environment of heightened financial concerns during and after COVID.
Going forward, Mr Fletcher points out that the sector has considerable room to scale up further. "The market is comfortable with the [international payment provider] model," he explains. "Students understand there are alternatives out there and that is really driving competition in this space." But he estimates as well that specialised payment providers are serving less than 15% of the addressable market at the moment, adding that, "There is plenty of room for growth as we continue to build awareness in the marketplace."
For additional background, please see:
